NHS Pension

Threesheds

Touchy subject this one.
My Mum was a Nurse in the NHS for 24 years, but was sacked for Gross Misconduct about 8 years ago. Following an inquiry, and twelve months suspension, on full pay, there was found no case to answer. She was paid £24,000 as part of a non disclosure agreement.
She was just glad it was over so accepted, and now Nurses outside the NHS.
Her pension was frozen at that time, she will be 60 next year, so question is, does anyone know if there is any advantage in leaving the NHS pension where it is, as she still working and loving it, no plan to retire.
NHS pension helpline is really no help.

Bookworm225

try posting your question on a more relevant board, eg pensions or tax
this is the housing questions board!

El_Torro

As i understand it no, there is no benefit in delaying when she starts taking the pension.

You’ve posted this in the wrong forum by the way, best to ask the moderators to move it to the Pensions forum. 

Hoenir

 Threesheds said:

NHS pension helpline is really no help.

Not their role to provide of this nature. The scheme rules will clearly lay out what deferred members are entitled too. 

Flugelhorn

as a deferred member she can take the pension and still work elsewhere - if she leaves it where it is and doesn't take it at NRA then some monthly payments are effectively lost

BrilliantButScary

Hi,
The following should be helpful:

https://www.nhsbsa.nhs.uk/member-hub

If your Mum's service is in the 1995 scheme, NRA (Normal Retirement age) is 60, therefore she should apply to take it at 60, as @Flugelhorn pointed out she will miss out on pension payments that she will not get back at a later date. Also see the following post:

https://forums.moneysavingexpert.com/discussion/6568035/nhs-1995-pension-doesnt-grow-after-60#latest

silvercar

I will move this to the pension board. @Threesheds

Lowtrawler

As others have said (assuming it is the 1995 scheme), she will effectively lose out unless she claims it at 60. She should start the process of claiming around 6 months before her birthday.

As she is still working, this might result in the pension being taxed quite heavily and, if she has no need of the pension income at this time, she might want to consider paying an equivalent value (to the 1995 pension) into new pension arrangements. This would generate additional income when she actually comes to retirement.

There might be options through her current workplace to pay in additional amounts or she could open a personal pension (SIPP or otherwise).

Andy_L

It wasn't frozen. It has been increasing in line with inflation

Lowtrawler

Andy_L said:

It wasn't frozen. It has been increasing in line with inflation

Indeed. It's amazing the number of people who think their deferred pensions are frozen and not increasing. To be fair, I have 2 deferred pensions and when I visit their sites, they both display the pension I was entitled to when I left on their front page. I have to click though to other pages in order to see the current value.

I spoke to someone 3 weeks ago (amazingly a senior manager working in the pension industry) who insisted one of his DB pensions from 15 years ago was frozen and so he had to transfer it because the value was being eaten away by inflation and they were getting transfer values of 50x that value.

Lowtrawler

The other thing to consider is what to do with the lump sum that comes with claiming the 1995 scheme pension. This will be 3x the annual pension amount and is paid tax free. It is worth planning how it will be used. If she has sufficient income in her current role, it might be possible to put this into a new pension arrangement; she may wish to build up a rainy day fund; she may use it to repay debts; she may buy a car / go on holiday etc.

The point is, have an idea how the lump sum will be used before it suddenly hits the bank account.